Regulation of the Digital Economy in Modern Conditions of

Competitiveness

KAMRAN ABDULLAYEV, MAHIR ABBASZADE, AYGUN ALİYEVA,

KONUL İBRAHIMOVA

Azerbaijan National Academy of Sciences, Baku,

positively influenced by factors such as the implementation of an effective economic policy in the country, the

development of a modern digital economy, and the stimulation of attracting foreign investment.

The development of the digital economy in globalizing world is considered one of the main priorities of

developed countries. However, as in other regional countries, there are certain problems in the development of

the digital economy, the introduction of ICT in all economic spheres, and the export of modern digital

technologies in the Republic of Azerbaijan.That is why it is important to regulate the digital economy in

Azerbaijan, taking into account international experience. The continuous reforms carried out in the Azerbaijan

on the basis of international experience in the field of digital economy are considered effective. The level of

development of the sphere of digitalization in the Republic of Azerbaijan, the output of products (services) in

the ICT sector and the volume of investments in fixed assets is not high compared to previous years. That is

Key-words: transport, economy, digital, investment, competition, information, sustainable development

Received: September 25, 2021. Revised: June 2, 2022. Accepted: June 21, 2022. Published: July 25, 2022.

1 Introduction

The process of digitization of the national economy

in the modern globalizing world is a new direction.

The process of preparing statistical reports,

determining international rating indicators in this

underway. The industrial revolution includes the

process of automation, robotization, use of artificial

intelligence, the introduction of modern digital

technologies in economic sectors [2]. The modern

process of digitization is associated with the

development of technological infrastructure. This

also leads to the introduction and rapid development

of scientific innovations in economic fields. In

recent years, developed countries have been

implementing new measures in the direction of

process of digitization between the countries of the

world has a different level of development. All

countries of the world are collectively divided into

several groups according to the level of digitization .

Leaders in the field of digitalization are countries

such as South Korea, Denmark, Great Britain,

Switzerland and China [4]. The group of major

which is considered one of the post-soviet countries,

serious measures are also being taken towards the

development of the digital economy (Skare,2021.

The Republic of Azerbaijan already faces such tasks

as achieving new goals in the development of the

digital economy. Thus, the digitalization of the

national economy, the formation of the digital

economy are among the main priorities for the

introduction of modern innovations in this area. The

Republic of Azerbaijan, located in the South

entered the top ten most successful countries in

Europe and Central Asia. In all countries of the

world, the Republic of Azerbaijan was ranked 25th

among 190 countries by rating. Azerbaijan

Republic occupies a leading position in international

rankings is the successful continuation of the broad

reforms carried out in the country in the economic

and social spheres [12].

infrastructure. At the same time, the creation of

digital products and services is impossible without

modern digital technologies [15]. The availability of

modern technological infrastructure is the basis of

the digitization process and the digital economy. In

recent years, the Internet of Things (IoT), 5G,

robotics, cybersecurity, and artificial intelligence

applications all over the world also require the

development of infrastructure. Providing internet

services in accordance with international standards

For example, the British consulting company

"Analysis Mason", specializing in

telecommunications, media and technology, present

information that in 2014-2020 mobile operators

around the world will spend 300 billion US dollars

on the development of internet infrastructure [7].

According to the report of the International

Association of Mobile Operators GSMA - "The

Mobile Economy 2019", from 2018 to 2025, the

level of the Internet of Things (IoT) worldwide will

technological infrastructure will lead to an increase

in the number of mobile internet users worldwide

(Samimi,2015). The prepared report shows that the

number of mobile internet users in 2018 amounted

to 3.6 billion. In 2025 this figure will be increseing

to 5 billion.

The improvement of international communication

services in the modern globalizing world leads to

the fact that internet services are in increasing

demand in the world every year. It is necessary to

formation of a new technological infrastructure [8].

The Republic of Azerbaijan, which has been

dynamically developing in recent years among the

post-soviet countries, is also constantly

implementing economic and technical measures to

turn into a regional digital center. In the Republic of

Azerbaijan Digital Hub program is being

successfully implemented. The main Internet

provider of the Republic of Azerbaijan is

AzerTelecom. The main goals of AzerTelecom is to

Azerbaijan Railways Company. For this purpose,

main fiber-optic cable lines have been laid along the

protective strip of railway lines within the Republic

of Azerbaijan. As a result, in the direction of ”

North-South " established a network connection

Europe and Asia. In the near future, it is planned to

lay a "Trans-Caspian highway" between Azerbaijan

and the Central Asian states along the bottom of the

Caspian Sea and the formation of an international

highway infrastructure. All this will make it possible

to create a regional data center in the Republic of

Azerbaijan in the near future and turn the country

into a center for international internet exchange.

platform for the development of the digital

Republic of Azerbaijan and export digital services

to neighboring regional states. All this will

eventually lead to the promotion of the Republic of

Azerbaijan in international rankings and an increase

in GDP several times. According to the latest

reports of the WEF, the development of the digital

economy has a huge impact on the country's GDP

growth. For example, the share of South Korea's

digital sector in GDP is 12%, the UK-7.1%, the

USA-7.4%, Finland-8.3%, Sweden-8.6% [9].

Economic Forum, in the next ten years, digital

platforms will account for up to 80% of the new

value that is formed in the national economy of

developed countries [15].

3 Methodology

The method of studying the statistical relationship

between one or several quantitative variables of a

dependent quantitative variable is called regression

analysis. The dependent variable in regression

analysis is called the resultant, and variable factors

are called predictors or explanatory variables. The

analysis shows that the linear regression model is

more widely used in the field of digital economy

Y= α 0 + α 1 *x1 + α 2 *x2 +...+ α k *x k +ε (1)

Here the variable y depends on the number of

variables X. ε is considered a random error.

The description of the dependence of Y on a linear

model with 2 variables is defined as follows (2):

Y = α 0 + α 1* x1 + α 2 * x2 + ε (2)

Regression analysis is very closely related to

practice, correlation analysis precedes regression

analysis. Having proved the existence of the

relationship by the method of correlation analysis,

the form of this interaction can be expressed using

regression analysis.

4 Result and Analysis

sectors. The “Strategic Roadmap" adopted in the

Republic of Azerbaijan, state programs for the

develop its economy and become the digital center

of the region among the post-soviet countries in the

near future, using the available economic resources.

Developing countries are also constantly

developing and implementing new economic

programs, strategies, strategic roadmaps for the

implementation of the digitalization process. In

addition, citizens of developing countries are

increasingly using digital technologies.

Fig. 1: The position of the Republic of Azerbaijan

countries such as Estonia was on the 25th place,

Kazakhstan - on the 37th, Russia - on the 42nd,

Turkey -on the 48th, Ukraine - on the 54th. It should

be noted that serious progress has been made in

these countries in implementing sustainable

measures for the development of the digital

economy (Figure 2).

Table 1. Production in ICT sector of Azerbaijan

(mln. manats (AZN)) and investments by İCT

occupied by the United States and the Chinese state

[15].

leading companies are constantly developing cloud

technologies, quickly switching to innovative digital

technologies [16]. At the same time, they are

completely updating their network infrastructure. It

should be noted that “Citrix” specializes in creating

innovative computer networks, developing new

technological programs around the world [10]. The

annual reports of “IDC” and “Seagate”, which are

considered the largest technology companies in the

world, note that as a result of digitalization and the

sphere will increase 5 times and amount to 175

zettabytes. Among all countries of the world, China

is considered one of the fastest growing countries in

the implementation of cloud solutions. China

accounts for the fastest growth in the global

information sphere in recent years [17].The

development of the digital economy in a globalizing

world creates favorable opportunities for consumers,

states and modern societies. Different countries are

implementing important measures to create a digital

technologies [18]. For example, the state of

Singapore adopted its "Smart Nation" concept in

2014. Local business structures and experts took

part in the implementation of this concept.

The concept of "Smart Nation", implemented by

the government of Singapore, provides for the use

of digital technologies in the daily lives of all

citizens of the country. It also contributes to

improving the quality of life of the country's

citizens. Small, medium and large companies are

digital economy [13].

For developed and developing countries around

the world, the formation of a digital economy is one

of the main priorities. The digitalization processes

Industrial Revolution (Industry 4.0), the Republic of

Azerbaijan correctly uses its geographical location,

rich natural resources and human resources. To this

end, the latest innovative trends in the field of ICT

are being introduced in the country. The

development of the digital economy in the Republic

of Azerbaijan and the use of modern digital

technologies ensure sustainable economic

development.

6 Conclusions

In recent years, the Republic of Azerbaijan has

been implementing important economic and

political measures aimed at the formation of the

digital market infrastructure and the sustainable

development of the ICT sector. The main goal here

is to ensure the transformation of the Republic of

Azerbaijan into a regional digital center. The

Digital Silk Road corridor between Europe and

Asia. In addition, the coordination of networks of

countries of Central Asia. As a result, Russia's

economic influence on these countries in the digital

sphere will be completely eliminated.

The implementation of the new “Digital Hub”

program in the Republic of Azerbaijan will

enhance its role in the “One Belt, One Road”

initiative project, which is considered an

international program of China. Republic of

Azerbaijan will have a great influence on the

transformation of this project into the main

expansion of the scope of information and

communication technologies. It should be noted

that the basis of the ICT infrastructure is broadband

access to the international Internet. Broadband

access requires the organization of a 4-5G mobile

network across the country using a full fiber optic

cable and satellite communications.

In general, based on the analysis conducted, we

considers to implement the following measures to

ensure the development of the digital economy in

economy;

- at the state level, state support for modern ICT

smart innovative projects for the development of

the digital economy should be continued;

- the state should stimulate the attraction of

domestic and foreign investments in the activities

of companies that produce and export innovative

ICT products to all sectors of the national

economy;

- continuation of joint cooperation with developed

direction development of the digital economy;

- Azerbaijan Republic should adopt new state

programs for the development of the digital

economy;

- stimulating the attraction of local and foreign

investment flows to increase the volume of

production of products and services in the field of

modern ICT and etc.

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Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

-Kamran Abdullayev: Data curation and resources,

formal analysis,

- Mahir Abbaszade: investigation,

- Aygun Aliyeva: methodology,

- Konul Ibrahimova: discussion, conclusion,

literature review

Sources of Funding for Research Presented in a

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